Tag Archives: Vodafone

Again a big boost to corporates from the Modi Government! Communications Minister Shr Ravi Shankar Prasad stated to day that the Government will not appeal against the decision of the Mumbai High Court waiving the tax of Rs. 3,200 crore to be paid by Vodafone to the Government. His argument is that the Government will not go in unnecessary appeals. Is due tax to be collected an unnecessary thing? According to him,more important may be the good relations with the MNCs and Corpoprates.

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In the new dispensation it is always the corporates which get the upper hand. The latest is the decision of the TDSAT setting aside the fines put on Airtel and Vodafone for illegally providing roaming in circles where they did not have licence. Airtel was fined Rs. 650 crore and Vodafone Rs. 100 crore by DOT for causing huge loss to the government and BSNL.

Setting aside the DOT decision, the TDSAT allowed costs at Rs.25,000 for each of the petitioners ie, Airel and Vodafone.

Is it because the government and BSNL did not argue the case effectively or some compromise? Any way it is a sad affair, the complainant becoming he victims before the law.

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Instead of continuing with strong measures to collect the tax arrears coming to about Rs. 14,000 crore from major telecom company Vodafone, the NDA Government is becoming soft. It has now appointed a negotiator, former Supreme Court Chief Justice R.C.Lahoti to deal with the issue.

It is reported that there are similar other tax arrears, which in total, would come to about Rs. 27,000 crore, including that of Nokia, Oyj etc. All these also will go to the negotiator for settlement.

The BJP spokesmen have already indicated that the retrospective tax practice would retard the confidence of the foreign investors, which is a clear indication that the new government at the centre is prepared to adjust the tax arrears. Such a decision will result in heavy loss to the exchequer and windfall profit to the private MNCs. The government should, instead, be firm in collecting the due tax arrears.

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The negotiations going on between the Govt. of India and Vodafone, the second biggest telecom company in India, on the tax arrears of Rs. 11,200 crore to be paid by the latter, seems to have been failed and the Government is
The conciliation had no moral justification. Because it is a foreign and influential company, the government was bending its knee, and coming out for conciliation. These MNCs, with the strong support from their governments, are trying to bend Indian rules to suit their requirement and maximise profit. While the conciliation was going on, the Vodafone put another demand that another tax case of Rs. 8,500 crore also be brought under this negotiation. That issue is pending in court and the government case is very strong. The government refused to agree to the proposal and stated that the negotiations on Rs.11,200 crore proposal will not continue.
In such a situation, Vodafone will have to pay about Rs. 20,000 crore including the interest etc.
We feel that these taxes which are due to the government should be strictly collected. There need not be any leniency towards the Corporate Tax evaders.

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How much the MNCs are cheating the government on taxes etc. is not fully known. But the following case is an indicator. The MNC is the telecom giant Vodafone.
There is already a tax case which is in talks to settle for an amount of Rs.13,000 crore with regard to its purchase Hutchinson stake in 2011. Secondly there is another tax case worth Rs. 3,700 crore with regard to sale of its Pune BPO arm which is in the court. Now the IT Department has put another tax demand of rs. 3,000 crore for an alleged transfer pricing case of 2010-11.
It is no wonder that telecom companies like Vodafone are getting profits after profits. They are continuously avoiding taxes and if notices are given they manage the government through politicians and bribing.
The casualties are PSUs like BSNL and MTNL which obeys the rule of the government.

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The corporates are chameleons. They change their opinions completely when it suits them.
Take the example of the tax arrears of Vodafone, Nokia etc. to be paid to the government. These companies go to arbitration, court etc. for getting the tax due cancelled or at least reduced. And the government is sympathetically hearing them.
Now the Competition Commission of India has levied a fine of Rs. 1,773 crore on Coal India Limited for ‘abusing’ its dominant position in the market. Nothing of corruption or tax-evading.But the corporates, media controlled by them, are shouting together that CIL should pay the penalty and not to go to the legal remedy.
Why this double talk? The only reason is that Vodafone, Nokia etc. are MNCs and private companies. They should not be ‘harassed’ by tax etc. But Coal India Ltd. is a PSU.Hence it should obey all rules and should pay the penalty without any opposition!

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The following case is a classic example of how the MNCs are dealing with the due tax to be paid by the to the Government of India.

The Income Tax Department has given notice to the mobile equipment manufacturing company NOKIA for an Income Tax of rs. 21,153 crores. The MNC has refused to pay stating that there is no tax to be paid and it will fight in the court. The company also stated that they are willing to close the case by paying a meagre amount of Rs. 3,000 crores, if the government agrees. Rs. 3,000 crore instead of Rs.21,153 crores!

A similar case is pending with Vodafone. It is to pay a tax of more than 12,000 crores. instead of paying it had gone to the court. The Finance Minister stated that negotiation can take place in the matter. In the same was negotiation may take with Nokia also.There is nothing wrong with negotiation. But what will happen with the UPA-II government is well known. The government will bends its knee before the MNCs and accept what they offer.

One the one side, the precious natural resources are sold to the corporates and MNCs for far less than their value and on the other hand even the due tax are not collected from them. It is not surprising that the Congress had to face ignominious defeat in the recent state assembly elections.

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The following case is a classic example of how the MNCs are dealing with the due tax to be paid by the to the Government of India.

The Income Tax Department has given notice to the mobile equipment manufacturing company NOKIA for an Income Tax of rs. 21,153 crores. The MNC has refused to pay stating that there is no tax to be paid and it will fight in the court. The company also stated that they are willing to close the case by paying a meagre amount of Rs. 3,000 crores, if the government agrees. Rs. 3,000 crore instead of Rs.21,153 crores!

A similar case is pending with Vodafone. It is to pay a tax of more than 12,000 crores. instead of paying it had gone to the court. The Finance Minister stated that negotiation can take place in the matter. In the same was negotiation may take with Nokia also.There is nothing wrong with negotiation. But what will happen with the UPA-II government is well known. The government will bends its knee before the MNCs and accept what they offer.

One the one side, the precious natural resources are sold to the corporates and MNCs for far less than their value and on the other hand even the due tax are not collected from them. It is not surprising that the Congress had to face ignominious defeat in the recent state assembly elections.

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It has become a habit of the foreign corporates to ignore the rules and regulations of the government of India and simply violate it. And finally they win, the government succumbs to their pressures.

The Income tax department assessed more than 10,000 crores arrears on the Vodafone and issued notice for payment. The latter simply ignored it first. Then it said that it can not pay and will approach the International Court. The Government of India bent its knee and had approached the MNC for negotiation. What will happen in the negotiation? There is no doubt that the govt. will at last surrender and exempt the MNC from paying tax.
Now it is the turn of the Walmart. The government has stipulated that there would be 30% procurement from small industries. Walmart now says that they can not agree to this condition and that it has got to be waived. The government, of course, will bend again. This is the UPA government.

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Vodafone has offered the government that it is prepare to pay Rs. 4,000 crore to keep its 2G spectrum, after the licence period over, which is going to be shortly. this is different from the stand taken by it along with Bharti Airtel and idea Cellular earlier. It is not known what differences have cropped after the three companies formed a cartel to defeat the recent actions of spectrum by not bidding at all.

One reason may be the government stand to negotiate with Vodafone regarding the RS.14,000 crore Income Tax to be paid by it. Instead of taking strong action to get the tax remitted by Vodafone, the government has offering Vodafone a chance to get out of the tax noose or at least reduce it drastically. Any way a crafty MNC like Vodafone will never agree to offer like mentioned earlier, unless there is good business opportunity.